United States General Accounting Office

United States General Accounting Office
__________________________________________________________________
GAO Information Management and Technology
Division

__________________________________________________________________
February 1990 Meeting the Government's Technology
Challenge

Results of A GAO Symposium

__________________________________________________________________
GAO/IMTEC-90-23

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PREFACE
-------
Managing the federal government's information technology is a
monumental task. Over 53,000 government computer and
telecommunications systems touch the lives of Americans each day.
As we stand on the brink of a new decade, the government is facing
the enormous challenge of modernizing many of these vital systems
to ensure that the public receives the services they expect and
deserve. Although the federal government is spending about $20
billion annually for this purpose, progress has been painfully
slow.

We cannot afford this lack of progress. With forecasts of tighter
budgets and a shrinking labor force, the government will soon have
to meet the needs of the American taxpayer with less funding and
fewer trained employees. Government leaders must increasingly
rely upon information technology to streamline operations, improve
service to the public, and handle the accelerating rate of change
that will undoubtedly face government in the 1990s.

On October 4 and 5, 1989, GAO sponsored a symposium, "Meeting the
Government's Technology Challenge," that brought together leaders
from industry and government to explore ways of better using
information technology to meet the demands facing the government
into the next century. This report builds on the symposium's
results to provide a framework for acquiring and managing
information technology. We believe this framework offers an
appropriate starting point for addressing the technology challenge
facing the government now and in the future.

Charles A. Bowsher
Comptroller General
of the United States

1

CONTENTS
--------
PREFACE

MEETING THE GOVERNMENT'S TECHNOLOGY CHALLENGE 3

The GAO Symposium: Focusing on the Technology Challenge 3

Symposium Results: Principles for Managing Information 4
Technology

The Challenge for the Future 9

APPENDIX I: BIOGRAPHIES OF INDUSTRY SPEAKERS 10

APPENDIX II: SYMPOSIUM PANELISTS 12

APPENDIX III: BIOGRAPHIES OF CONGRESSIONAL SPEAKERS 13

APPENDIX IV: MAJOR CONTRIBUTORS TO THIS REPORT 14

ABBREVIATIONS

ADP Automatic Data Processing

IMTEC Information Management and Technology Division

GAO General Accounting Office

USAA United Services Automobile Association

2

MEETING THE GOVERNMENT'S TECHNOLOGY CHALLENGE
---------------------------------------------
Information technology systems are the lifeblood of the federal
government, sustaining vital functions such as tax collection, aid
to our elderly and disadvantaged citizens, and national defense.
Yet it is becoming increasingly clear that many of these systems
are approaching a state of crisis. Some of the most critical
ones, such as those used by the Internal Revenue Service to
process taxes, were designed almost 30 years ago and rely on
antiquated equipment and outdated designs. Given the likelihood
of continuing population increases, the demand for government
services may outstrip the processing capability of many of today's
systems before the end of this century.

Attempts to modernize the government's information systems have
produced few successes and many costly failures. Over the past
several years GAO has found skyrocketing costs, long delays, and
elusive benefits to be characteristic of far too many information
technology projects. The causes most often cited for this bleak
history are a lack of effective leadership by senior managers,
ineffective communication among those involved in developing
information systems, incomplete knowledge of the customer's needs,
the absence of a clear and complete systems plan or architecture,
and frequent turnover among project managers and other key
personnel. This record of failure has resulted in a lack of
public confidence regarding the government's ability to manage
information systems projects. In light of the current budget
deficit and the growing demand for government services, federal
managers must find a way to break this cycle of failure and begin
creating a workable strategy for meeting the demands of the
future.

THE GAO SYMPOSIUM: FOCUSING ON
-------------------------------
THE TECHNOLOGY CHALLENGE
------------------------
Modernizing the federal government's information technology is an
enormous and complex undertaking. Given the government's
disappointing record in this area, a consensus has been building
among federal leaders that new ways of addressing this challenge
must be explored. In October 1989 GAO convened a symposium,
"Meeting the Government's Technology Challenge," to foster new
ideas and fresh approaches to developing and managing the
government's information technology systems. By bringing together
leaders from industry, the Congress, and the executive agencies,
we sought to begin a dialogue involving the major parties involved
in helping the federal government use technology to meet the
nation's needs. Dr. Peter Keen, Executive Director of the
International Center for Information Technologies, moderated the
symposium.

During the 2-day event, participants explored information
technology issues and debated ways to ensure that the government

3

will receive the greatest benefit for its information technology
investments. To begin the symposium, speakers from private
industry who had been highly successful in developing information
technology systems recounted their experiences. Their
presentations were particularly pertinent because the challenges
facing these organizations were similar to those confronting the
government; each was involved in delivering services to the public
that required processing large amounts of data in short amounts of
time. The speakers and the organizations they represent were
General Donald Lasher (ret.), President for Information Systems,
United Services Automobile Association (USAA); John Fisher, Senior
Vice President, Banc One Corporation; Jim Grant, Executive Vice
President for Systems and Technology, The Royal Bank of Canada;
and Barry Kotar, President and Chief Executive Officer, Covia
Corporation. Appendix I contains additional information on these
speakers.

Following the industry speakers, panels composed of
representatives from federal agencies, congressional committees,
private industry, and academia discussed alternatives for
addressing the federal government's dilemma. The ideas generated
in the panels were then debated during a plenary session.
Appendix II contains a listing of the panelists. Senator Frank
Lautenberg of New Jersey and Representative Edward Markey of
Massachusetts offered congressional perspectives on the
information technology challenge. Additional information on these
speakers is provided in appendix III.

SYMPOSIUM RESULTS: PRINCIPLES FOR
----------------------------------
MANAGING INFORMATION TECHNOLOGY
-------------------------------
Five principles for effective management of information technology
emerged during the symposium. Together they provide a framework
for successfully integrating information technology into the
business of government. GAO's experiences over the years in
reviewing the government's use of this technology has confirmed
the validity of these principles. GAO suggests that agency heads
examine their use of information technology and apply the
following principles when developing and managing their technology
plans.

Principle 1: Commitment and Vision Begin at the Top
----------------------------------------------------
Most successful automation efforts begin with a top manager who
has a clear vision of how the organization can benefit from
information technology and a commitment to making this vision a
reality. Without clear direction and support from the top,
modernization programs tend to degenerate into loose collections
of independent systems. Often these systems are developed under
the oversight of technical managers who focus on the needs of
their individual units rather than the organization's larger
mission and goals. The net result is that the systems that are

4

developed do not effectively meet the organization's or the
public's needs.

The importance of visionary leadership was clearly illustrated by
John Fisher of Banc One in describing the financial services
industry. During the last decade--when many banks were losing
ground to their competitors--bank managers were repeatedly
criticized as lacking vision. An important aspect of this lack of
vision was the bank managers' reluctance to embrace the promise of
technology. He noted that this situation has recently changed,
with many banks viewing technology as a strategic tool enabling
them to stay ahead of the competition. Mr. Fisher suggested that
the federal government's need for visionary leadership was
analogous to the banking environment during the last decade.

Senior managers should examine their missions and begin to look
forward--beyond the next budget cycle--to find the best way of
serving the needs of the public in the future. Instead of simply
automating existing processes and procedures, leaders need to take
a fresh look at alternative ways of accomplishing their goals and
embody this new thinking into a vision that can guide systems
development over the long term. According to General Lasher of
USAA, if information systems are developed in concert with a clear
long-range vision, they become the organization's "strategic
weapon" for effectively accomplishing its goals.

After examining their mission in light of the public's future
needs, agency leaders should prepare clear, forward-looking
statements articulating the vision. Such a statement should
describe what services the agency is to provide now and in the
future and present critical milestones for implementing the
vision. Specific technology plans should then be developed that
will transform this vision into reality.

The agency's senior official for information resources management
should play a leading role in these activities. Specifically,
this official should assist in defining the vision and preparing
the agency's technology plan, and then ensure that the ongoing and
proposed systems development projects fall logically within this
plan. The symposium participants reached a consensus that
agencies need to redefine the role of the senior information
resources management official and elevate the authority of this
position to ensure that these responsibilities are fulfilled.

Principle 2: Partnerships Can Help Define the Vision
-----------------------------------------------------
Forging alliances and cultivating partnerships is an essential
part of defining and implementing an agency's strategic vision.
Having access to the best available knowledge and advice from
government, industry, and academia is critical when establishing
the vision and the supporting architecture. Advisory panels,
private consulting firms, research foundations, and other

5

government agencies can provide fresh, independent perspectives
and new insights. Alliances with external organizations such as
these were cited by symposium particitants as being invaluable.

Within an organization, partnerships between program offices and
technical groups, at all levels, can promote effective
communication and cooperative working relationships. Agencies
should establish such partnerships as a means of ending the
artificial and damaging split between technical planning and
program implementation. Jim Grant of The Royal Bank of Canada
noted that allowing both groups--technical and program--to
actively participate on architectural planning committees almost
guarantees that concerns, ideas, and solutions from both sides
will be aired and addressed.

General Lasher echoed this approach for establishing
organizational partnerships. USAA has created an "executive
partnership" among senior managers from both program units and
systems groups that promotes a cooperative environment.
Representing top management, USAA's Architecture Review Board
regularly convenes to ensure that stated policies and information
technology projects conform to the organization's vision for the
future. The consensus among the symposium participants was that
agency officials should establish similar boards to ensure that
the guiding vision is realized.

Agency leaders should also involve the Congress as an active
partner in defining and implementing their vision. Top management
must clearly articulate to the Congress how the vision will help
achieve the agency's mission and describe how each major
information technology project will contribute to realizing the
vision. It is particularly important that the information
provided to decisionmakers is as complete and realistic as
possible. Further, agency management needs to evaluate and
discuss with the Congress the impact its vision will have on the
organizational structure and congressional constituencies.
Technological change often entails organizational change; agencies
should have a plan for managing both and should communicate these
plans to the Congress. With a clearer understanding of the
agency's vision and goals, the Congress will be in a better
position to make informed oversight decisions and assist in
resolving difficult issues. Both Senator Frank Lautenberg and
Representative Edward Markey highlighted the importance of working
together to resolve the technology challenges facing the
government.

Principle 3: Service to the Public Should be the Vision's
----------------------------------------------------------
Cornerstone
-----------
Successful use of information technology requires understanding
the needs of the customer and letting those needs dictate how
technology is used. Government typically focuses its attention on

6

internal operational needs, with little regard to an important
aspect of its mission--meeting the needs and desires of the
American public. Planning for information technology without
considering the needs of the public can backfire, resulting in
underutilized systems, increased costs, and dissatisfied
customers.

During the symposium, industry leaders repeatedly emphasized that
their organizations' strategies were driven to a large extent by
the needs of their customers. According to Barry Kotar, Covia
Corporation's technology plan is based on a comprehensive
assessment and understanding of the customer's priorities and
needs. In many federal agencies, the services they provide are
limited by what their systems can handle, not what the taxpayer
wants. Successful leaders must be in a position to anticipate how
their technology systems can accommodate changes in taxpayer
requirements. Echoing this point, Jim Grant observed that forming
a virtual partnership with the customer is essential for
developing a service-oriented system.

Senior executives should make a concerted effort to understand and
incorporate the needs of the American public in developing
information technology strategies. They must actively seek to
identify and understand the taxpayers' needs, both now and in the
future, and not rely on the perceived demands of the past.
Specific vehicles for obtaining this information could include
customer surveys and pilot testing. Evidence that agencies are
listening to taxpayers' views will encourage a sense of confidence
that scarce tax dollars are being used appropriately.

Principle 4: A Clear, Flexible Architecture Should Support the
---------------------------------------------------------------
Vision
------
Information systems are one of the most important tools for
effectively accomplishing the organization's mission. For maximum
efficiency and effectiveness, these systems should be developed as
part of an overall architecture or plan. An architecture is a
blueprint explaining the structure of and communications among an
organization's information technology resources--hardware,
software, and people. It is the foundation upon which an agency
builds, modifies, and expands its organizational operations.

The architecture should drive all major technology purchases.
Rather than simply buying information technology without a clear
plan for how it will fit into the agency's overall strategy,
leaders need a comprehensive plan that will dictate the equipment
and resources required. This should reduce the likelihood of
acquiring inappropriate or duplicate technology and ensure that
the technology can be integrated with existing systems.
Developing a collection of independent information systems with no
underlying foundation or architecture is unacceptable.

7

A clear, well-conceived architecture also offers the possibility
of building an integrated information system one piece at a time,
thereby minimizing the risks inherent in an all-or-nothing
strategy. Constructing a system incrementally provides
flexibility to modify or expand the system in response to changes
in customer needs, legislative requirements, or technological
advances. Barry Kotar, for example, built Covia's system
incrementally using proven building blocks, thereby reducing the
project's risks. This modular approach also enables the customer
to begin reaping the benefits of the system sooner. The symposium
participants agreed that it was preferable to avoid very large,
monolithic projects in favor of developing smaller, modular
components within the architecture.

Principle 5: Management Continuity Is Needed To Implement the
--------------------------------------------------------------
Vision
------
Continuity at the project management level is essential to
realizing the vision. In the past, government has had difficulty
maintaining the continuity necessary to provide consistent
direction and clear accountability for information systems
development efforts. All too often, changes in management occur
that significantly affect the direction of an information systems
project, thereby increasing costs, delaying the delivery of the
project's benefits, and clouding accountability for the project's
success.

Assembling and retaining a team of highly qualified officials to
manage critical information systems projects is essential to
implementing the vision. Jim Grant stressed that the quality of
the people supporting the leaders in the organization will
determine whether the vision can be carried out. Operating on
this philosophy, The Royal Bank of Canada established an intensive
university recruiting program to ensure that highly skilled
students are being hired. In this vein, symposium participants
agreed that a move toward professionalizing the field of
information resources management would enhance the quality of
project managers. Suggestions offered included establishing a
governmentwide training curriculum and developing a federal
project management methodology.

Since retaining key, highly qualified officials to maintain
continuity within technology projects is a major dilemma, agencies
should explore new ways of bringing continuity to the process of
managing these projects. For example, developing a detailed long-
term strategy that can transcend personnel changes would mitigate
some of the risks associated with management turnover. Using
advisory committees and individual consultants to provide
consistent institutional memory and perspective would also help
achieve continuity.

8

THE CHALLENGE FOR THE FUTURE
----------------------------
As we move toward the next century, information technology
promises to provide higher quality government services at reduced
cost to the public. The challenge of making this promise a
reality rests primarily with our leaders, who must provide the
commitment and vision necessary to change the way government
operates in this critical arena. Specifically, GAO believes that
for this endeavor to be successful, federal leaders will need to

-- charge the senior information resources management official in
each agency with defining and implementing a clear yet flexible
architecture that embodies the agency's vision of how it will
do business in the future;

-- encourage the formation of internal and external partnerships
through organizations such as architecture planning committees,
review boards, or advisory committees;

-- clearly explain the agency's overall vision and direction in
providing information to the Congress;

-- ground all technology decisions in a thorough understanding of
the needs of the public;

-- adopt a modular approach to developing major systems and
consider capping the size of project phases where
implementation risks are high;

-- explore ways of professionalizing the field of information
resources management, such as establishing a governmentwide
training curriculum and developing a federal project management
methodology; and

-- foster continuity through the use of detailed long-term plans,
advisory committees, and individual consultants.

These steps constitute a promising agenda for action, but they are
only a beginning. The dialogue begun during the symposium must be
continued, new insights must be shared, and new solutions must be
found if the government is to meet its technology challenge.

The time to act is now. The information technology crisis the
government is facing will not resolve itself; it requires
immediate action and continuing attention. Committed, visionary
leadership is needed to address this crisis. Agency heads should
demonstrate this leadership by applying the framework to their
strategies for acquiring and managing information technology.

9

APPENDIX I APPENDIX I

BIOGRAPHIES OF INDUSTRY SPEAKERS
--------------------------------
John F. Fisher
--------------
Banc One Corporation
--------------------
John Fisher is Senior Vice President for Banc One Corporation.
Known today as an innovator in electronic consumer banking, Banc
One enjoys great success: it is the third most profitable bank in
Ohio's five-state area and boasts over $36 billion in assets.

Mr. Fisher's first major banking innovation was the bank credit
card. In 1966, Banc One joined with Bank of America, which
enabled Banc One to market the credit card nationally. The
BankAmericard, later renamed Visa, was the first nationally
accepted credit card and established Banc One as a banking leader.
Under Mr. Fisher, Banc One also produced the first on-line credit-
card authorization service and the first form of overdraft
protection, linking credit cards together with checking accounts.
Mr. Fisher has set a precedent in the industry by demonstrating
the close relationship between technology and banking in meeting
the needs of the customer.

J.C. (Jim) Grant
----------------
The Royal Bank of Canada
------------------------
Jim Grant is the Executive Vice-President for Systems and
Technology at The Royal Bank of Canada. The Royal Bank is
Canada's largest, with assets exceeding U.S.$90 billion and having
1,500 domestic branches plus 240 international offices.

Headquartered in Montreal and Toronto, The Royal Bank has been a
leader in the application of new technologies for efficient
operational management and for providing a variety of
sophisticated services. Under Mr. Grant's leadership, The Royal
Bank has expanded its electronic network for both personal and
commercial banking.

Barry A. Kotar
--------------
Covia Corporation
-----------------
Barry Kotar is President and Chief Executive Officer of Covia
Corporation, a position he has held since the company was formed
in January 1987 as an operating subsidiary of United Airlines. In
August 1988, United sold half of Covia to five other air carriers,
forming a partnership with USAir, British Airways, KLM Royal Dutch
Airlines, Swissair, and Alitalia.

Covia is the leading worldwide travel distribution company. Under
Mr. Kotar's leadership, the company develops and markets advanced
automation products, information systems, and network services,

10

APPENDIX I APPENDIX I

including the world's most advanced computer reservation system.
Mr. Kotar's philosophy stresses developing systems that will
support corporate growth and expansion in the future.

Gen. Donald R. Lasher
---------------------
United Services Automobile Association
--------------------------------------
Donald Lasher is President of Information Services for United
Services Automobile Association, an insurance and financial
services company noted as a technological leader. General Lasher
provides the automated systems, communications, and computer
support for all USAA activities. Directing a 1,500-person systems
and telecommunications staff, he oversees an operation whose
budget exceeds $125 million annually and includes the world's
largest automatic telephone call distribution system under one
roof.

At USAA, General Lasher spearheaded development of an automated,
multifunctional workstation environment with on-line, real-time
support to over 11,500 users worldwide. He also directed the
development of a highly successful image-processing system that
captures and stores all of USAA's incoming property and casualty
policy service mail.

11

APPENDIX II APPENDIX II

SYMPOSIUM PANELISTS
-------------------

Dr. Maryam Alavi, Associate Professor of Information Systems,
University of Maryland

Jack L. Brock, Director, Government Information and Financial
Management, U.S. General Accounting Office

Herbert R. Doggette, Jr., Deputy Commissioner for Operations,
Social Security Administration

John R. Dyer, Deputy Commissioner for Management, Social Security
Administration

Robert Gellman, Staff Member, Subcommittee on Government
Information, Justice and Agriculture, House Committee on
Government Operations

Edward J. Gleiman, Staff Director, Subcommittee on Federal
Services, Post Office and Civil Service, Senate Committee on
Governmental Affairs

Theodore F. Gonter, Director, Systems Engineering and Integration,
Internal Revenue Service

Steven Katz, Chief Counsel, Subcommittee on Government Information
and Regulation, Senate Committee on Governmental Affairs

Francis A. McDonough, Deputy Commissioner for Federal Information
Resources Management, General Services Administration

Peter C.S. Nicoll, Manager, Business Management Program, The Royal
Bank of Canada

Henry H. Philcox, Acting Assistant Commissioner, Computer
Services, Internal Revenue Service

Fred L. Sims, Assistant Commissioner, Information Resources
Management Policy, General Services Administration

Dr. Rona B. Stillman, Chief Scientist, U.S. General Accounting
Office

Lynda Woodman, President, International Center for Information
Technologies

12

APPENDIX III APPENDIX III

BIOGRAPHIES OF CONGRESSIONAL SPEAKERS
-------------------------------------
Sen. Frank R. Lautenberg
------------------------
State of New Jersey
-------------------
Frank Lautenberg represents the state of New Jersey in the United
States Senate. Since 1985 he has been a member of the Senate
Appropriations Committee, with key roles on various subcommittees.
In 1987 Senator Lautenberg began chairing the Committee's
Subcommittee on Transportation.

After graduating in 1949 from Columbia University with a degree in
economics, Senator Lautenberg began selling payroll services for a
small business in New Jersey. Aided by computer technology, this
business evolved into Automatic Data Processing (ADP), Inc.,
marking the beginning of the American computing services industry.

Over the past 30 years, ADP, Inc., has become a worldwide leader
in the computing industry. Senator Lautenberg served as Chief
Executive Officer and Chairman of the Board until elected to the
Senate in 1982. Today, ADP is the largest computing services firm
in the world, with annual revenues of more than $1 billion and
more than 22,000 employees.

Rep. Edward J. Markey
---------------------
Seventh District of Massachusetts
---------------------------------
A graduate of Boston College School of Law, Edward Markey was
elected to the Congress in 1976 from the seventh district of
Massachusetts. Since his election to the Congress, he has risen
steadily in the ranks of its committee structure.

In 1987 Representative Markey took over the chairmanship of the
Telecommunications and Finance Subcommittee of the Energy and
Commerce Committee, a post that holds particular interest for him
because of Boston's growing financial sector and Massachusetts'
role as a leader in the high-technology community. As
subcommittee chairman, he presides over interstate and foreign
telecommunications, including all telecommunications and
information transmission. Representative Markey's recent efforts
involve overhauling the regulation of securities laws to prevent a
recurrence of the stock market crash of 1987.

13

APPENDIX IV APPENDIX IV

MAJOR CONTRIBUTORS TO THIS REPORT
---------------------------------
Information Management and Technology Division, Washington, D.C.
----------------------------------------------------------------
Ralph V. Carlone, Assistant Comptroller General, (202) 275-4892
Timothy P. Bowling, Assistant Director, (202) 275-8008
Leslee A.L. Bollea, Deputy Project Manager
Lee H. Ho, Deputy Project Manager

(510429)

14